Many nations, especially in Europe, are finding it hard to carry out the austerity measures needed to pull their economies out of the debt trap.
With elections and fiscal measures failing to bring relief, cost of insuring sovereign debt of eurozone states is rising again.
Let's look at 21 countries most likely to default on loans they have taken from various financial institutions, such as World Bank and International Monetary Fund.
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Debt trap: 21 countries facing default
Current 5-year Mid CDS (bps): 1393.33
The Greek debt rating was decreased to BB+ (a 'junk' status) by Standard & Poor's amidst fears of default by the Greek government.
The yield of the Greek two-year bond reached 15.3 per cent in the secondary market.
Standard & Poor's estimates that in the event of default investors would lose 30 50 per cent of their money.
A credit default swap (CDS) is a form of insurance which protects the buyer of the CDS in the case of a loan default. If the loan defaults, the buyer of the CDS can exchange or swap the defaulted loan (or in some CDSs the reduced cash value of the defaulted loan) for the face value of the loan.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 1026.92
The economy of Venezuela is largely based on the petroleum sector, which accounts for roughly a third of the country's GDP, around 80 per cent of total exports, and more than half of the government operating revenues.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 663.67
The economy of Portugal is a high income mixed economy.
Most imports come from the European Union countries of Spain, Germany, France, Italy and the United Kingdom. Most exports also go to other European Union member states.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 662.83
The economy of Ireland has transformed in recent years from an agricultural focus to a modern knowledge economy, focusing on services and high-tech industries and dependent on trade, industry and investment.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 612.77
The economy of Argentina is Latin America's third-largest, with a high quality of life and GDP per capita.
The country benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 450.02
The economy of Ukraine is an emerging free market, with a gross domestic product that fell sharply for the first 10 years of its independence from the Soviet Union and then experienced rapid growth from 2000 until 2008.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 359.35
Lebanon's economy and markets are best described as a developing economy.
The private sector contributes to around 75 per cent of aggregate demand, a well-diversified sector that covers the totality of economic sectors and is a major pillar for growth and recovery.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 305.45
Vietnam has been rising as a leading agricultural exporter and an attractive foreign investment destination in Southeast Asia.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 275.67
The economy of Spain is the twelfth-largest economy in the world, based on nominal GDP comparisons, and the fifth-largest in Europe.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 264.83
The economy of Croatia is a service-based economy, with the service sector accounting for 67 per cent of the total GDP.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 260.00
The economy of Hungary is a medium-sized, structurally, politically and institutionally open economy in Central Europe and is part of the European Union's single market.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 230.17
Romania has a developing, upper-middle income market economy, the 11th-largest in the European Union by total nominal GDP and the eighth-largest based on purchasing power parity.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 203.50
The economy of Bulgaria is an industrialised, free market economy with steadily growing tourism sector and a moderately advanced private sector.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 201.50
Lithuania is a member of the European Union and the biggest economy among three Baltic states.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 167.88
Italy has a capitalist economy with high GDP per capita and developed infrastructure.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 164.21
The country is among the world's leading producers of agricultural products; textiles; motor vehicles, ships and other transportation equipment; construction materials; consumer electronics and home appliances.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 156.88
The modern, private enterprise economy of Belgium has capitalised on its central geographic location, highly developed transport network, and diversified industrial and commercial base.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 151.52
The economy of Kazakhstan is the largest economy in Central Asia. It possesses enormous fossil fuel reserves as well as minerals and metals.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 147.98
The economy of Israel is a diversified market economy with moderate state ownership, consisting of a rapidly developing high-tech sector.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 140.32
The economy of Poland is a high income economy and is the sixth-largest in the EU and one of the fastest growing economies in Central Europe.
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Debt trap: 21 countries facing default
Current 5-year CDS Price (bps): 136.83
The economy of Russia is the eleventh-largest economy in the world by nominal value and the sixth largest by purchasing power parity.
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